ENERGY POLICY - April 15, 2016 Roundtable Weekly

Senate Breathes New Life into Omnibus Energy  Legislation, With Possible Floor Votes Next Week   

In a rapid turn of events, Senate Republicans and Democrats reportedly reached agreement on Wednesday to start voting as early as next week on an omnibus energy bill — breaking an impasse that stalled the legislation for months due to acrimony over the Flint, Michigan water crisis and controversies regarding offshore drilling.   Energy-efficiency language included in the bill avoids the creation of a federal-level, regulatory building energy code — a position supported by The Roundtable and national real estate organization partners.  Other legislative proposals in past sessions of Congress sought to establish a “one-size-fits-all” federal building energy code administered and enforced by the U.S. Energy Department (DOE), which the real estate industry opposed.

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Senators Rob Portman (R-OH) and Jeanne Shaheen (D-NH)

The Energy Policy Modernization Act (S. 2012), introduced last year by Senate Energy Committee Chairman Lisa Murkowski (R-AK) and Ranking Member Maria Cantwell (D-WA), would be the “first major energy bill to come to the Senate floor since the Bush Administration,” reports The New York Times (April 13, 2016).  Of key importance to real estate are the bill’s provisions concerning energy efficiency in commercial buildings that were developed over many years by Senators Rob Portman (R-OH) and Jeanne Shaheen (D-NH) with heavy input from The Roundtable, other real estate stakeholders, product manufacturers, and environmental advocates.  (Roundtable Weekly, Feb. 5, 2016 and June 22, 2012.)

The Portman-Shaheen provisions would also require DOE to consider impacts on cost, return on investment, small businesses, and tenant “plug loads” when developing any energy efficiency building targets that may ultimately be worked into state and local building codes.  The bill also requires that any proposed DOE building energy targets be established through rulemaking proceedings that gather input from real estate and other stakeholders — a major “government transparency” step that the agency presently does not implement. 

Separate energy efficiency legislation that created "Tenant Star" was signed into law last spring, after it was spun off from the broader energy bill now teed-up for a Senate vote next week.  As discussed during this week's Roundtable business meeting, a priority of The Roundtable's Sustainability Policy Advisory Committee (SPAC) is to monitor Tenant Star’s progress at the administrative level as the federal DOE prepares to submit a study to Congress later this month on the design and construction of high performance tenant spaces leased in commercial buildings. 

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SPAC is  chaired by Anthony E. Malkin (Empire State Realty Trust), left, and Charlotte Matthews (Related Companies), right. 

[SPAC — chaired by Anthony E. Malkin (Empire State Realty Trust) and Charlotte Matthews (Related Companies) — submitted a formal comment letter in October 2015 to DOE on The Roundtable’s behalf to inform the agency’s imminent Tenant Star study to Congress.)

Assuming the broad energy bill clears the Senate next week (or soon thereafter), the next likely step would be conference committee talks to resolve differences between the two chambers’ energy bills. The House approved its own energy measure (H.R. 8) last December, sponsored by Energy and Commerce Committee Fred Upton (R-MI).  The Roundtable will work to ensure that key provisions from both bills are retained in any future House-Senate compromise measure.

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